The shekel is gaining sharply in afternoon inter-bank trading ahead of President Trump’s meeting at 6pm Israeli time with prime Minister Benjamin Netanyahu in which he will present his plan for a Gaza ceasefire. The shekel is 0.71% lower against the dollar at NIS 3.321/$, and 0.81% lower against the euro at NIS 3.887/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate down 0.293 from Friday, at NIS 3.404/$, and the representative shekel-euro rate was set 0.962% higher at NIS 3.936/€.
First International Bank trading room manager Idit Moskovich mentions three main reasons for the strengthening of the shekel today. She says, “The main reason is related to positive developments regarding a comprehensive ceasefire in Gaza and the return of the hostages.”
She adds two more reasons. “US market gains over the weekend also have an impact. As has been the case recently, the correlation is maintained. When US markets rise, it strengthens the shekel.” The explanation for this lies in the behavior of institutional investors, who need to sell dollars to balance their exposure to foreign exchange.
Moskovich continues, “Positive macroeconomic data has been published in Israel for July. The Bank of Israel’s composite index indicates growth of nearly 5% in the third quarter, after a contraction of about 4% in the second quarter. In addition, industrial production increased in July by about 5% compared with the first quarter average.”
Unrealized risks
On the impact of the Trump-Netanyahu meeting on the markets, Moskovich says, “If there are positive developments, we will continue to see the shekel strengthen, and it may test the NIS 3.295/$ level it touched in July and mid-August. This point constitutes a support point for the rate.”
Mor Mutual Funds chief investment office Yotav Kostika also stresses a direct connection between market behavior and events in Washington: “The Israeli stock market continues to be a roller coaster reflecting geopolitical events, from the declines after Netanyahu’s Sparta speech to the recent increases due to the expectation of an upcoming agreement on Gaza. There is no doubt that all eyes are on the meeting between Trump and Netanyahu.”
In his assessment, “An agreement will push the local stock market forward to new highs and support the shekel, but we have to wait to see if this will actually happen this time. If we don’t see an agreement, we have to take into account that the risk to the Israeli market will increase due to the global boycott trend we have been experiencing in recent weeks – risks that do not seem to be fully reflected in stock prices at the moment.”
Published by Globes, Israel business news – en.globes.co.il – on September 29, 2025.
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